Discussions around the rising costs of food inflation is a common phenomenon, we observe it in round-table conferences in air-conditioned boardrooms to animated conversations at our local tea shops. We are often baffled at how much onions, potatoes, or tomatoes cost these days. A simple vegetable basket, once an afterthought in the monthly budget, has become a talking point, a grievance, and sometimes even a political flashpoint. It is getting so costly to simply sustain. However, as food volatility dominates the national discourse, a quieter and arguably more consequential form of inflation is being consistently overlooked, the relentlessly rising cost of education. Unlike the price of tomatoes, which at least has the decency to fall after a spike, education costs never look back.
Looking at the data, it is easy to understand that the cost of education in India has emerged as a persistent, structural burden on household finances. Unlike the cyclical nature of commodity prices, swinging with monsoons, supply shocks, and global cues, education inflation exhibits a deeply ‘sticky’ upward trend. We don’t see it cooling or correcting, we only see it rising. Just like we progress from kindergarten to a doctorate, education inflation is achieving its own heights.
If we look at the decomposition of Consumer Price Index (All India) inflation over the period January 2013 to December 2025, we find a sobering reality for the Indian middle class. The education index grew from approximately 103.6 in early 2013 to over 195 by late 2025, representing a near-doubling of costs in just over a decade. An 89 per cent surge, increasing not in bursts, but persistently, month after month, year after year.
What makes this particularly striking is the near-total absence of any relief. Of the 150 months analysed, education recorded almost no periods of price cooling, which is very unlike the food or fuel segments, both of which oscillate with market forces and occasionally grant households a temporary relief. Education offers no such relief. There are no off-seasons, no deflationary spells, and no government-mandated price ceilings that actually hold. Every academic year brings with it a fresh round of fee revisions, and the direction is always the same; upward.
In hindsight, education inflation has averaged around 5.01 per cent annually well above the 4 per cent target maintained by the Reserve Bank of India. For a central bank that has spent considerable political and monetary capital trying to anchor inflation expectations, education stands out as a stubborn outlier. It is a segment where price discipline has simply not taken hold. What is more alarming is that certain studies estimate real education inflation in the range of 10-12 per cent annually, which is significantly higher than overall CPI inflation. The official figure appears moderate, primarily because government schooling with its administratively controlled, near-stagnant fee structures tends to dilute the index. The official data, in other words, is measuring a reality that fewer and fewer households actually live in. The masking of the far steeper price escalation experienced by the majority of urban and aspirational households who have migrated to private institutions, is only silently felt by the households.
So why does this inflation persist so relentlessly? The answer lies in a set of interlocking structural dynamics that together create a self-reinforcing price spiral.
The first is the wage-price link. As general inflation rises, educational institutions face higher costs, teacher salaries, utility bills, infrastructure maintenance, and compliance with regulatory mandates such as those under National Education Policy 2020. To cover these rising input costs, institutions hike fees. These fee hikes feed back into household expenditure, raising the cost-of-living, which in turn creates pressure for further wage revisions, and the cycle perpetuates itself. Unlike most markets where price increases invite competition and eventual correction, the education market in India has not developed enough credible alternatives at scale to break this loop.
The second, and perhaps more revealing dynamic, is what we might call the ‘inelasticity of aspiration’. Families treat education as a non-negotiable investment, it is not a luxury to be reduced when budgets tighten, but a necessity to be funded at almost any cost. Educational institutions know this. With this near-captive demand as their foundation, they pass on infrastructure upgrades, technology investments, salary hikes, and even construction costs without meaningfully fearing a drop in enrolment. The result is a market where the usual consumer resistance to price hikes is largely absent. The Great Indian Wallet Study, 2025 reports that parents spend 20-30 per cent of their annual household income on education when all costs such as tuition, transport, uniforms, coaching classes, digital tools, and exam fees are aggregated. For many middle-class families, education has quietly become the single largest line item in the household budget, surpassing even rent or healthcare.
The third dynamic is structural price stickiness itself. While vegetable prices change daily, sometimes dramatically, education institutes’ fees are revised annually. But here lies the crucial asymmetry: once a fee is increased, it sets a new permanent floor. Each annual hike compounds the previous one, and over a decade, these seemingly modest annual increases accumulate into the near-doubling of costs we observe in the index. This one-way ratchet effect is what fundamentally distinguishes education inflation from food inflation.
The data-driven reality of the last decade confirms that education is no longer just a social good, but it is a significant, compounding economic pressure point for millions of Indian families. As costs continue to nearly double every 10 to 12 years, the structural challenge for policymakers is clear: how do we balance educational quality with financial accessibility? How do we ensure that the aspiration to educate one’s children does not become a source of financial distress or, worse, a reinforcer of inequality? The answer likely lies in a combination of meaningful fee regulation for private institutions, a genuine revival of trust in public schooling, and broader financial support mechanisms for households caught in this relentless cost spiral.
Because if the engine of India’s growth is its human capital, then the rising cost of building that human capital is not just a household problem, it is a macroeconomic one.
Aarushi Joshi is Assistant Professor with the Department of Economics, Dr. Bhim Rao Ambedkar College, University of Delhi
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth